KATHMANDU: For nearly a decade, United Telecom Limited (UTL) has occupied a valuable slice of Nepal’s telecommunications spectrum without doing what a telecom operator is supposed to do: operate a network.

Now, with its licence due to expire on September 4, 2026, the dormant operator is seeking a new lease on life. The complication is substantial. UTL owes the state roughly Rs 30.8 billion in licence fees, spectrum charges, royalties, rural telecommunications development levies, penalties and other liabilities. It has applied for renewal, but has not cleared the arrears that normally accompany such an application.

That makes UTL’s case more than a dispute over an old licence. It is a test of whether Nepal’s telecom regulator will enforce the rules it has spent years trying to apply-or bend them for a company with influential connections.

A renewal without repayment

UTL submitted its renewal application to the Nepal Telecommunications Authority (NTA) on 2 June, 2026, three months before the licence expires. Under the relevant rules, an operator seeking renewal is expected to settle its existing obligations and pay the renewal fee.

UTL has proposed a different arrangement. It says it can pay around Rs13bn immediately, with the remainder spread over ten instalments. But the first instalment would come only after its foreign-investment approval is secured, with payment to follow within a month of that approval.

That condition has turned a routine renewal into a regulatory dilemma: should a company with billions in unpaid liabilities receive a fresh licence first and settle its debts later?

The stakes are higher because UTL still holds spectrum in the 850MHz, 900MHz and 1800MHz bands. The company has also proposed returning to the market with 5G services.

The promise of 5G, however, cannot erase the record of 4G-or even basic mobile service-that never arrived.

Ten years, no network

UTL received its basic telecommunications licence on September 5, 2016, allowing it to provide nationwide services, including GSM mobile services. The licence requires operations to begin within 12 months.

That deadline passed. Then another year. Then several more. Nearly ten years later, UTL has still failed to establish a meaningful commercial network or customer base. A company that was expected to become another player in Nepal’s mobile market instead became a long-running occupant of scarce spectrum.

That raises a simple economic question: what is the opportunity cost of allowing a dormant operator to retain a scarce public resource?

Spectrum cannot be manufactured. If one operator holds it without deploying services, competitors cannot use the same resource. The state potentially loses revenue, while consumers lose another source of competition and potentially better service.

The people behind the comeback

UTL was originally backed by Indian state-owned telecom companies Mahanagar Telephone Nigam Limited (MTNL) and Telecommunications Consultants India Limited (TCIL), along with Tata Communications. Raj Bahadur Singh is reported to hold a 20% stake through Nepal Ventures.

The Indian shareholders are no longer seen as actively involved in the company, according to sources familiar with its affairs. The ownership and management structure has consequently become more fragmented, while Singh has emerged as a prominent figure in efforts to revive the company.

Singh, who is married to Princess Prerana, daughter of former King Gyanendra Shah, has been actively lobbying for UTL’s renewal, according to people familiar with the process. His involvement also extends to managing interests associated with the company’s foreign investors, the sources say.

The broader ownership and business network linked to UTL has, at various stages, also included businessman Upendra Mahato, his sister and Julie Mahato-Raghubir Mahaseth. For the regulator, however, connections should matter less than credentials.

The “fit and proper” test

A telecom licence is not simply a commercial asset. It grants access to a strategic national resource. That makes the character, competence and financial credibility of the proposed owners and managers central to any renewal decision.

The regulator therefore faces several questions.

Does the proposed management have the technical and managerial experience required to run a telecommunications operator? Can the investors demonstrate a legitimate source for the capital they propose to inject? Is the ownership structure transparent enough to identify the ultimate beneficial owners? Are there conflicts of interest or significant adverse regulatory records?

The regulator must also examine whether any investor or associated company has previously been involved in serious corporate failure, insolvency or regulatory breaches.

Most importantly, do the proposed owners and managers satisfy the “fit and proper” standard expected of operators in a strategically important sector?

Nepal has already seen the consequences when telecom licences are granted without sufficient attention to financial strength, governance and execution. UTL itself is part of that history. So is Smart Telecom.

The debt is only half the story

The NTA’s latest calculations indicate that UTL has outstanding obligations across several categories, including licence renewal fees, spectrum fees, royalties, the Rural Telecommunications Development Fund and penalties.

The precise size of the liability has varied with the calculation date and accumulated charges, but the broad picture is unmistakable: UTL has not cleared its obligations to the state.

That makes the renewal decision a test of regulatory credibility.

If a company can retain valuable spectrum for years, accumulate billions in liabilities, avoid commercial operations and still return to the regulator at the end of its licence term seeking renewal, other operators will inevitably ask why they should play by stricter rules.

The courts became part of the story

UTL’s history with the regulator has repeatedly moved through Nepal’s courts.

When the NTA attempted to recover arrears or move towards licence cancellation, UTL challenged regulatory action. In 2019, after the authority warned that the licence could be cancelled over unpaid dues, the company approached the Supreme Court. On 13 May, 2019, Justice Purushottam Bhandari’s single bench issued an interim order in UTL’s favour.

The order effectively delayed recovery and other regulatory action pending a decision concerning the company’s proposed capital increase.

The NTA challenged the order, but the process dragged on. Meanwhile, the company’s liabilities continued to accumulate.

By the end of December 2022, the authority was demanding Rs5.31bn in arrears alone.

The legal battle had bought the company time. The regulatory question remained unresolved. After the NTA issued a 15-day ultimatum on June 8, 2023 to pay the dues. Five months after the expiration of the ultimatum, the proposal to revoke UTL’s license has reached the board of the NTA.

A major turning point came on February 14, 2024 when the Supreme Court dismissed all the writ petitions filed by UTL against the government. UTL’s petitions, clearing the way for the regulator to resume recovery and licence-cancellation proceedings.

Another unfinished telecom project

UTL’s record is not confined to its dormant mobile licence. A joint venture involving UTL, Teleinfra Nepal JV, was awarded a project to lay optical fibre along the Mid-Hill Highway. Nepal Telecommunications Authority (NTA) had signed an agreement with UTL in April 2017 to lay the fibre network in Gandaki Province and Province 5. The project received a Rs402m mobilisation advance from the NTA on February 19, 2019.

The project subsequently became embroiled in a dispute over performance and the bank guarantee. Court intervention delayed the regulator’s attempt to recover the guarantee.

In February 2024, however, the Supreme Court opened the way for the NTA to terminate the contract and proceed with enforcement of the bank guarantee. The regulator subsequently seized a Rs502.5m guarantee held at Kumari Bank.

Yet the broader cost remains harder to calculate: years of public money tied up, the financing cost of that delay and the economic loss associated with an incomplete strategic infrastructure project.

A regulator that waited

The NTA’s own leadership has also come under scrutiny. Former chairman Digambar Jha faced questions over the decision to involve UTL in the optical-fibre project despite the company’s limited record of operational success. Later, during Bhupendra Bhattarai’s tenure, critics again questioned why decisive action against UTL was not taken.

UTL was required to begin service by 05 September 2017. Instead of cancelling the licence, the regulator imposed a Rs500,000 penalty in 2017 for failing to comply with its rollout obligations.

For a licence tied to billions of rupees in public resources, the penalty was hardly a deterrent.

The NTA later warned again, on June 7, 2024, that failure to settle the company’s growing liabilities could result in cancellation. Yet the licence survived.

According to sources within the authority, the proposal concerning UTL’s licence cancellation has remained before the NTA board for roughly two years.

That is the most revealing part of the saga. The law may be relatively clear. The enforcement has not been.

A wider business record

Singh’s involvement also brings his wider business history into focus.

After Nepal opened the petroleum-import business to private players following the 2015 Indian blockade, Singh was reported to have explored the petroleum trade through representative Deepak Timalsina. Malika Petroleum obtained permission to import petroleum products, but the proposed business did not develop into sustained operations.

Singh reportedly sought to lease Nepal Oil Corporation infrastructure and had prepared a nationwide distribution plan. The office associated with the venture was eventually closed without the business taking off.

He has also been associated with investments in casinos, communications and manufacturing, including UTL, Mero Mobile and Nebico.

In the cooperative sector, Singh became associated with the troubled Sumeru Savings and Credit Cooperative in Lalitpur. The cooperative’s liabilities and alleged misuse of depositors’ funds were examined by a parliamentary special committee, which questioned Singh in Singh Durbar.

None of these episodes, by themselves, determines whether UTL should receive a telecom licence. But together they make the regulator’s due-diligence obligation harder to ignore.

A decision bigger than UTL

The government and the NTA now face a choice that goes well beyond one company.

They can renew UTL’s licence under a restructuring and repayment arrangement, potentially allowing a new investor group to revive the operator. Or they can enforce the licence conditions, cancel the licence and pursue the outstanding liabilities.

The first option could bring another competitor and fresh investment into Nepal’s telecom market. The second would demonstrate that spectrum is not a perpetual right and that regulatory obligations cannot be postponed indefinitely.

Either way, the decision will establish a precedent.

If UTL can return after a decade of commercial inactivity, carrying tens of billions of rupees in liabilities, and secure a new licence without first resolving its obligations, other operators will take note.

If the regulator instead insists on payment, transparency, technical competence and a credible ownership structure, it will send a different message: Nepal’s spectrum is a public asset, not a private option.

The central question is therefore remarkably simple.

Why should a company that has failed to deliver a single commercial mobile call in ten years be trusted with another decade of Nepal’s scarce telecommunications spectrum? The answer will say as much about Nepal’s regulator as it does about UTL.